Full Year Results year ended 31 December 2024

30 April 2025

Red Capital Plc

("Red Capital" or the "Company")

Full Year Results for the period ended 31 December 2024

Red Capital Plc (LSE: REDC) has today published its Annual Report and Financial Statements for the period ended 31 December 2024 (the "Annual Report").

In accordance with UK Listing Rule 6.4.1 copies of the Annual Report have been submitted to the FCA and will shortly be available to view on the Company's website at https://www.redcapitalplc.com/ and for inspection from the National Storage Mechanism at: https://data.fca.org.uk/#/nsm/nationalstoragemechanism.

LEI: 213800O4A398G6GL7270

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Chairman's Statement

I am pleased to present the financial results for Red Capital Plc ("Red" or the "Company") and its subsidiary (together the "Group") for the year ended 31 December 2024.

Since establishing the Company we have remained focused on executing our strategy and continue to assess investment and acquisition opportunities where we believe there to be sustainable growth potential both organically, and through acquisition.

2024 proved to be another challenging year for the UK's capital markets. IPO and RTO activity was materially behind longer term historical averages, and although there was a pick up in deal volumes towards the end of the year, the market for private companies coming to list in London remained subdued.

As we progress through the new financial year, we are starting to see some of the 2024 headwinds linked to the uncertainty of the UK election and certain government policy decisions dissipate, and we remain encouraged by listings reform in particular, and in general, the potential for capital inflows into the UK as a result of recent economic and political instability within the US. This could go some way in improving market liquidity and the attractiveness of London as an appropriate destination for quality private companies both from within the UK and internationally. 

We look forward to updating further as our investment and acquisition plans develop, and would like to thank our loyal shareholders for their support and patience while we continue to evaluate a number of opportunities, that if secured, we believe have the potential to deliver value for the Group.

David Williams

Chairman

29 April 2025

Report of the Directors

The Directors of the Company present their report for the year ended 31 December 2024.

PRINCIPAL ACTIVITY AND BUSINESS REVIEW

For the financial year ended 31 December 2024, the Group and Company's principal activities were that of a holding group and company, respectively.

The Company was incorporated for the purpose of identifying suitable acquisition opportunities in accordance with the Company's investment and acquisition strategy. The Company will retain a flexible investment and acquisition strategy which will, subject to appropriate levels of due diligence, enable it to deploy capital in target companies by way of minority or majority investments, or full acquisitions where it is in the interests of shareholders to do so (including transactions with target companies located in the UK and internationally). It is anticipated by the Directors that acquisition opportunities could be with private companies, other listed business, or via the acquisition of divisional or non-core carve outs. The Company's strategic aim is to drive shareholder value through the acquisition of target companies in certain sectors where the Directors believe there to be sustainable growth opportunities both organically, and through acquisition. In particular, sectors of focus include business services and technology companies. Where target companies are acquired, the Directors and incoming management teams will seek to drive operational improvements and best practice to unlock revenue and cost synergies.

It is possible the Board may consider acquisitions that do not conform to all of the above framework. However, in all cases, the Company's strategic aim is to drive Shareholder value through the acquisition of target companies in certain sectors where the Directors believe there to be sustainable growth opportunities both organically, and through acquisition.

The Group and Company have actively pursued their strategy through the sourcing and assessment of acquisition and investment opportunities in the business services and technology sectors.

RESULTS

During the year, the Group recorded a loss of £233,650 (2023: loss of £215,031) and the loss per share was 2.34p (2023: loss per share of 2.15p), reflecting moderate monthly operating expenses of the Group. The Group and Company had cash reserves at the end of the year of £160,427 (2023: £399,766) and net assets of £122,729 (2023: £354,810). 

DIVIDENDS

At this point in the Company's development, it does not anticipate declaring any dividends in the foreseeable future. As such, the Directors do not recommend the payment of a dividend for the year.

FUTURE DEVELOPMENTS

The Directors expect to continue to execute the Group's strategy in sourcing and assessing acquisition and investment opportunities across its stated sectors of focus.

KEY PERFORMANCE INDICATORS

The Board continues to focus on maximising shareholder value by sourcing, assessing and where in the interest of shareholders to do so, investing in and acquiring businesses within the business services and technology sectors.

Follow completion of the Company's inaugural transaction, the Board will be in a position to identify and develop its key performance indicators for on-going monitoring and management.

GOING CONCERN

The Directors, having made due and careful enquiry, are of the opinion that the Group and Company have adequate working capital to execute their operations over the next 12 months ("the going concern period"). The Group and Company's unaudited cash balance as at 10 April 2025 was £107,683. Excluding the consummation of any investment or acquisition which will likely require specific funding, the Group and Company have adequate resources available to fund the on-going forecast operating expenses during the going concern period as a result of the Group and the Company's current unaudited cash balance, as well as the provision of a letter of financial support provided by the Directors to the Group. Having also performed additional stress testing on the forecasts, the Directors are comfortable there are also sufficient mitigating actions on the incurring of expenditure within the business that could be taken, to ensure the business can meet its ongoing liabilities as they fall due. The Directors, therefore, have made an informed judgement at the time of approving the financial statements, that there is a reasonable expectation that the Group and Company have adequate resources to continue in operational existence for the foreseeable future. As a result, the Directors have adopted the going concern basis of accounting in preparing the annual financial statements (see note 2).

RISK MANAGEMENT

In order to execute the Group's strategy, the Company and its subsidiaries will be exposed to both financial and non-financial risks. The Board has overall responsibility for the Group's risk management and it is the Board's role to consider whether those risks identified by management are acceptable within the Group's strategy and risk appetite. The Board therefore periodically reviews the principal risks and considers how effective and appropriate the controls that management has in place to mitigate the risk exposure are and will make recommendations to management accordingly.

As the Company had not completed its first investment or acquisition in the year, it has limited financial statements and/or historical financial data, and limited trading history. As such, the Company during the year was subject to the risks and uncertainties associated with an early-stage acquisition company, including the risk that the Company will not achieve its investment objectives and that the value of an investment could decline and may result in the partial or complete loss of capital invested. The past performance of investee companies or assets managed by the Directors will not necessarily be a guide to future business, results of operations, financial condition or prospects of the Company.

In order to mitigate against these risks, the Directors will continue to undertake thorough due diligence on investment opportunities and acquisition targets, to a level considered reasonable and appropriate by the Company on a case-by-case basis, including the potential commissioning of third-party specialist reports as appropriate. Following completion of any investment or acquisition, it is intended that any investments or assets will be managed by the Directors and assisted by the Company's professional advisers.

Financial Risk Management

The Directors consider the Group to be exposed to the following financial risks:

Given the relatively small size and operation of the Group in the year, the Directors have not delegated the responsibility of risk monitoring to a sub-committee of the Board, but closely monitor the risks on a periodic basis. The Directors consider their exposure in the financial year to have been low. Refer to note 14 for assessment of the risks arising from financial instruments.

Non-financial Risk Management

The non-financial risk factors for the year ended 31 December 2024 did not materially change from those set out in Red's Prospectus dated 16 November 2021.

GREENHOUSE GAS EMISSIONS, ENERGY CONSUMPTION AND ENERGY EFFICIENCY

As the Company has not completed its first acquisition and has only two Directors, limited travel and no premises, the Directors do not consider any disclosure under the Task Force on Climate-related Financial Disclosures is required at this juncture, however the Company will continue to review this position as it executes its investment and acquisition strategy.

POLITICAL CONTRIBUTIONS

The Company has made no political contributions during the year.

CHARITABLE DONATIONS

The Company has made no charitable donations during the year.

POST BALANCE SHEET EVENTS

Details of post balance sheet events are disclosed in note 20.

SHARE CAPITAL

Details of the Company's share capital is set out in note 15. The Company's share capital consists of one class of ordinary share, which does not carry rights to fixed income. As at 31 December 2024, there were 10,000,000 ordinary shares of 1p par value each in issue.

SIGNIFICANT SHAREHOLDERS

As at 11 April 2025, the Company had been advised of the following notifiable interests (whether directly or indirectly held) in voting rights.

As at 11 April 2025, the Directors in aggregate held 5,500,000 ordinary shares, which represents 55.0 per cent. of the Company's issued share capital.

COMPANY DIRECTORS

The Directors during the year and summaries of their experience are set out below.

David Williams Non-Executive Chairman (aged 72)

David has over 40 years' experience in investment markets, serving as Chairman in executive and non-executive capacities for a number of public and private companies. He has overseen the development of these companies, raising in excess of £1 billion of capital to support both organic and acquisitive growth initiatives.

David was the original founder of Marwyn Capital LLP, the award-winning investment management company. David was also formerly Chairman of Entertainment One Ltd. (LSE: ETO), Zetar plc, and Oxford BioDynamics Plc (AIM: OBD), and Non-Executive Director of Breedon Group plc (LSE: BREE). He currently serves as Non-Executive Chairman of the AIM-quoted cyber security business, Shearwater Group plc (AIM: SWG) and Main Market listed Acceler8 Ventures Plc (LSE: AC8) and is a Non-Executive Director of Bay Capital Plc (LSE: BAY).

Simon Webster Non-Executive Director (age 55)

Simon is a highly experienced software and technology entrepreneur, and is currently Group Chief Executive Officer of Vistra, a global leader in fund administration and corporate services. Prior to this he was Chief Executive Officer of CPA Global, a global leader in intellectual property software and tech-enabled services. Simon led CPA Global over a 20-year period, growing it from an initial £50 million business into $6.0 billion of enterprise value before its merger with NYSE listed Clarivate Plc (NYSE: CCC) in October 2020.

His early career was spent in the UK financial services sector leading business change, delivering technology transformations and supporting M&A transactions.

Simon has been investing in and working with founders of growth businesses as Founder and CEO of SHUFL Capital since 2010. He is also a Fellow of the Chartered Institute of Management Accountants.

The Directors who held office during the year and their beneficial interest in the share capital of the Company at 31 December 2024 were as follows:

DIRECTORS REMUNERATION

The Chairman and Non-Executive Director are each entitled to fees of £30,000 and £20,000 per annum for their respective roles within the Company, as per their service agreements entered into on 15 November 2021. There are no other benefits paid to Directors outside of their service fees, save for ordinary course reimbursable expenses properly incurred in the performing their duties as Directors. The Company does not operate a pension scheme. 

In addition to the Directors' fee entitlements outlined above, the Directors are also participants in the Subco Incentive Scheme and holders of warrants as detailed below.

SUBCO INCENTIVE SCHEME

The Directors believe that the success of the Company will depend to a high degree on the future performance of key employees and advisers in executing and supporting the Company's growth strategy. The Company has therefore established equity-based incentive arrangements which are, and will continue to be, an important means of retaining, attracting and motivating key employees, consultants and advisers, and also for aligning the interests of the Directors with those of shareholders.

On 12 November 2021, the Group created a new Subco Incentive Scheme within its wholly owned subsidiary Red Capital Subco Limited. Under the terms of the Subco Incentive Scheme, scheme participants are only rewarded if a predetermined level of shareholder value is created over a three to five year period or upon a change of control of the Company or Subco (whichever occurs first), calculated on a formula basis by reference to the growth in market capitalisation of the Company, following adjustments for the issue of any new ordinary shares and taking into account dividends and capital returns ("Shareholder Value"), realised by the exercise by the beneficiaries of a put option in respect of their shares in Subco and satisfied either in cash or by the issue of new ordinary shares at the election of the Company.

Under these arrangements in place, participants are entitled up to 15 per cent. of the Shareholder Value created, subject to such Shareholder Value having increased by at least 12.5 per cent. per annum compounded over a period of between three and five years from Admission, or following a change of control of the Company or Subco.

In order to implement the Subco Incentive Scheme, the Company as sole shareholder of Subco, approved the creation of a new share class in Subco (the "B Shares"). At the same time the Subco's existing ordinary shares were redesignated A Shares. The B Shares do not have voting or dividend rights.

On 12 November 2021, David Williams, Chairman of the Company, Simon Webster, a Non-Executive Director of the Company, and Kathleen Long and Anthony Morris, Directors of Tessera Investment Management Limited ("Tessera"), became the first participants in the Subco Incentive Scheme ("Founder Participants"), and as such, the proportion of Shareholder Value attaching to the Subco Incentive Scheme is 11 per cent. of a total cap of 15 per cent.

The Founder Participants and their respective holdings are outlined below.

There were no new incentives granted under the Subco Incentive Scheme during 2024.

WARRANTS

On 15 November 2021, the Company constituted 10,000,000 warrants on the terms of an instrument under which the Company issued 6,000,000 warrants to certain existing shareholders of the Company including the Directors, and a further 4,000,000 warrants on admission of the Company to the Main Market of the London Stock Exchange.

The warrants are exercisable at any time from the date of completion of the inaugural transaction (an investment or acquisition) made by the Company where the consideration for such transaction is at least £10 million at a price of £0.10 per ordinary share. These warrants can be exercised through application to the Company. The warrants will not be listed on the London Stock Exchange or any other publicly traded market.

The Directors' respective warrant holdings are detailed below.

CORPORATE GOVERNANCE

As a Jersey company and a Shell Company (Equity Shares) on the London Stock Exchange, under the new UK Listing Rules ("UKLR"), the Company is not required to comply with the provisions of the UK Corporate Governance Code 2018. Furthermore, there is no applicable regime of corporate governance to which the directors of a Jersey company must adhere over and above the general fiduciary duties and duties of care, skill and diligence imposed on such directors under Jersey law. Notwithstanding this, the Directors are committed to maintaining high standards of corporate governance and will be responsible for carrying out the Company's objectives and implementing its business strategy.

All investment, acquisition, divestment and other strategic decisions are considered and determined by the Board. At present, the Board reviews investment and acquisition opportunities on and as required basis, and meets regularly with its Strategic Advisor to discuss possible inorganic growth opportunities, as well as monitor deal flow and investment and acquisitions in progress, and review the Company's strategy to ensure that it remains aligned to the delivery of shareholder value. Those investment and acquisition opportunities that are assessed by the Board (with support from its Strategic Advisor) are considered in light of the investment and acquisition criteria as detailed in the Company's Admission Document. In addition, as part of the investment and acquisition screening process, the Company will augment Board and Strategic Advisor capability on a case by case basis as required with industry and operating partner input, where deep domain expertise can be accessed. The Board provides leadership within a framework of prudent and effective controls. The Board has established the corporate governance values of the Company and has overall responsibility for setting the Company's strategic aims, defining the business plan and strategy and managing the financial and operational resources of the Company.

In this regard, the Board, so far as is practicable given the Company's size and stage of its development, has voluntarily adopted the 2023 QCA Code as its chosen corporate governance framework. There are certain provisions of the QCA Code which the Company will not adhere to currently, and their adoption will be delayed until such time as the Directors believe it is appropriate to do so. It is anticipated that this will occur concurrently with the Company's first material investment or acquisition. Details on how the Company applies the ten principles of the 2023 QCA Code are set out below and on the Company's website at www.redcapitalplc.com.

ROLE OF THE BOARD

The Board is responsible for the management of the business of the Group, setting the strategic direction of the Group and establishing the policies of the Group. It is the Directors' responsibility to oversee the financial position of the Group and monitor the business and affairs of the Group, on behalf of the shareholders, to whom they are accountable. The primary duty of the Directors is to act in the best interests of the Group and Company at all times. The Board also addresses issues relating to internal control and the Group's approach to risk management and has formally adopted an anti-corruption and bribery policy.

The Group does not have a separate investing committee and therefore the Board as a whole will be responsible for sourcing acquisitions and ensuring that opportunities are in conformity with the Group's strategy.

The Group holds four formal Board meetings a year.

The Directors commit sufficient time to discharge their duties as directors of the Company, and meet the expectations of their respective roles. There is no maximum time commitment specified, and outside of formal board meetings, the Directors devote additional time to the Company in respect of preparatory work and ad hoc meetings, particularly when the Company undergoes increased corporate activity.

During the year, each Director attended all four of the formally scheduled quarterly Board meetings of the Company.

The Group has not adopted a formal policy on diversity; however, it is committed to a culture of equal opportunities for all, regardless of age, race or gender. The Board is currently made up of two male directors and there are no other employees in the Company.

INTERNAL CONTROLS

The Board acknowledges its responsibility for establishing and monitoring the Group's systems of internal control. Although no system of internal control can provide absolute assurance against material misstatement or loss, the Group's systems are designed to provide the Directors with reasonable assurance that problems can be identified on a timely basis and dealt with appropriately.

The Group maintains an appropriate process for financial reporting. The annual budget is reviewed and approved by the Board before being formally adopted.

Other key procedures that have been established and which are designed to provide effective control are as follows:

Management structure - The Board meets regularly on a formal and informal basis to discuss all issues affecting the Group.

Investment appraisal - The Group has a robust framework for investment appraisal and approval is required by the Board, where appropriate.

Share dealing and inside information - the Company has adopted a share dealing code regulating trading and confidentiality of inside information for the Directors and other persons discharging managerial responsibilities (and their persons closely associated) which contains provisions appropriate for a company whose shares are admitted to trading on the Official List (particularly relating to dealing during closed periods which will be in line with the Market Abuse Regulation). The Company takes all reasonable steps to ensure compliance by the Directors and any relevant employees with the terms of that share dealing code.

The Board reviews the effectiveness of the systems of internal control and considers the major business risks and the control environment. No significant deficiencies have come to light during the period and no weaknesses in internal financial control have resulted in any material losses, or contingencies which would require disclosure, as recommended by the guidance for Directors on reporting on internal financial control.

The Directors are focused on careful management of the Group's cash and financial resources through Board level approvals. At such time that the Group completes an acquisition, the Directors anticipate that the Group's financial position and prospects procedures regime will be updated and expanded as necessary to cater for the nature of the Group's business following completion of its inaugural investment or acquisition.

EXTERNAL ADVISERS

The Board accessed the following external advisers during the year and post the year end for ongoing business as usual matters:

Mayer Brown International LLP and Ogier (Jersey) LLP - legal

Tessera Investment Management Limited - capital markets and M&A

JTC Plc - company secretarial, governance and regulatory filings

CONFLICTS OF INTEREST

A Director has a duty to avoid a situation in which he or she has, or can have, a direct or indirect interest that conflicts, or possibly may conflict, with the interests of the Company. The Board has satisfied itself that there are no conflicts of interest where the Directors have appointments on the Boards of, or relationships with, companies outside the Company. Furthermore, the Board requires Directors to declare all appointments and other situations which could result in a possible conflict of interest, and therefore believes it has a robust framework to deal with any conflict of interest should it arise.

DISCLOSURE OF INFORMATION TO THE AUDITOR

So far as the Directors are aware, there is no relevant audit information of which the Group and Company's auditor is unaware, and each Director has taken all the steps that he ought to have taken as a Director in order to make himself aware of any relevant audit information and to establish that the Group and Company's auditor is aware of that information.

The Directors confirm to the best of their knowledge that:

INDEPENDENT AUDITOR

The auditor, MHA, previously traded through the legal entity MacIntyre Hudson LLP. In response to regulatory changes, MacIntyre Hudson LLP ceased to hold an audit registration with the engagement transitioning to MHA Audit Services LLP. The auditor, MHA, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD

David Williams

Chairman

29 April 2025

Statement of Directors' Responsibilities

The Directors are responsible for preparing the Directors' report and the financial statements in accordance with applicable law and regulations.

Jersey Company law requires the directors to prepare financial statements for each financial period. Under that law the Directors have elected to prepare the consolidated financial statements in accordance with International Financial Reporting Standards as adopted by the United Kingdom ("IFRS") and the Company financial statements in accordance with FRS 101 "Reduced disclosure Framework", the Financial Reporting Standard applicable in the UK. Under company law, the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and Company and of the profit or loss of the Group for that year.

In preparing these financial statements, the Directors are required to:

The Directors are responsible for keeping proper accounting records that are sufficient to show and explain the Group and Company's transactions and disclose with reasonable accuracy at any time the financial position of the Group and Company and enable them to ensure that the financial statements comply with the Companies (Jersey) Law 1991. They are also responsible for safeguarding the assets of the Group and Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The maintenance and integrity of the Group's website is the responsibility of the Directors. The work carried out by the auditors does not involve the consideration of these matters and, accordingly, the auditors accept no responsibility for any changes that may have occurred in the accounts since they were initially presented on the website. Legislation in Jersey governing the preparation and dissemination of the accounts and the other information included in annual reports may differ from legislation in other jurisdictions.

Consolidated Statement of Comprehensive Income

For the year ended 31 December 2024

The Group has no items of other comprehensive income in either the current or prior period. All activities in both the current and the prior period relate to continuing operations.

The notes below form part of these consolidated financial statements.

Consolidated Statement of Financial Position

As at 31 December 2024

The consolidated financial statements were approved and authorised for issue by the Board on 29 April 2025 and were signed on its behalf by:

David Williams

Chairman

The notes below form part of these consolidated financial statements.

Consolidated Statement of Changes in Equity

For the year ended 31 December 2024

The notes below form part of these consolidated financial statements.

Consolidated Statement of Cash Flows

For the year ended 31 December 2024

The consolidated cash flows for the year ended 31 December 2023 have been restated to separately disclose cash flows relating to interest received on cash balances. Previously this was included within the increase in trade and other receivables.

As the Group does not have any financing liabilities outside of working capital and has no cashflows from financing activities in both periods presented, no separate net debt reconciliation has been presented within these consolidated financial statements.

The notes below form part of these consolidated financial statements.

Notes forming part of the Consolidated Financial Statements

For the year ended 31 December 2024

The Company is a public limited company incorporated and domiciled in Jersey, whose shares are publicly traded on the London Stock Exchange as a Shell Company (Equity Shares). The Company is the parent company of Red Capital Subco Limited (a private limited company under the laws of Jersey with registered number 134741), and together form the "Group".

The address of its registered office is 28 Esplanade, St. Helier, Channel Islands, JE2 3QA, Jersey.

The Group has been incorporated for the purpose of identifying suitable acquisition opportunities in accordance with the Group's investment and acquisition strategy with a view to creating shareholder value. The Group will retain a flexible investment and acquisition strategy which will, subject to appropriate levels of due diligence, enable it to deploy capital in target companies by way of minority or majority investments, or full acquisitions where it is in the interests of shareholders to do so. This will include transactions with target companies located in the UK and internationally.

The accounting policies set out below have, unless otherwise stated, been applied consistently to all periods presented in theses consolidated financial statements.

The principal policies adopted in the preparation of the consolidated financial statements are as follows: 

(a) Basis of preparation

These consolidated financial statements have been prepared in accordance with the requirements of International Financial Reporting Standards as adopted by the United Kingdom ("IFRS") and the requirements of the Companies (Jersey) Law 1991.

The consolidated financial statements are prepared on the historical cost basis.

The comparative figures presented cover the year ended to 31 December 2023.

(b) Basis of consolidation

The consolidated financial statements present the results of the Company and its subsidiaries (the "Group") as if they formed a single entity. Intercompany transactions and balances between Group companies are therefore eliminated in full.

Where the Group has control over a Company, it is classified as a subsidiary. The Group controls a Company if all three of the following elements are present: power over the Company, exposure to variable returns from the Company, and the ability of the Group to use its power to affect those variable returns. Control is reassessed whenever facts and circumstances indicate that there may be a change in any of these elements of control.

The consolidated financial statements incorporate the results of business combinations using the acquisition method. In the consolidated statement of financial position, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The acquisition related costs are included in the consolidated statement of comprehensive income on an accruals basis. The results of acquired operations are included in the consolidated statement of comprehensive income from the date on which control is obtained.

(c) Functional and presentational currency

The Group's functional and presentational currency for these financial statements is the pound sterling.

(d) Going concern

The Directors, having made due and careful enquiry, are of the opinion that the Group and Company have adequate working capital to execute their operations over the next 12 months ("the going concern period"). The Group and Company's unaudited cash balance as at 10 April 2025 was £107,683. Excluding the consummation of any investment or acquisition which will likely require specific funding, the Group and Company have adequate resources available to fund the on-going forecast operating expenses during the going concern period as a result of the Group and the Company's current unaudited cash balance, as well as the provision of a letter of financial support provided by the Directors to the Group. Having also performed additional stress testing on the forecasts, the Directors are comfortable there are also sufficient mitigating actions on the incurring of expenditure within the business that could be taken, to ensure the business can meet its ongoing liabilities as they fall due. The Directors, therefore, have made an informed judgement at the time of approving the financial statements, that there is a reasonable expectation that the Group and Company have adequate resources to continue in operational existence for the foreseeable future. As a result, the Directors have adopted the going concern basis of accounting in preparing the annual financial statements (see note 2).

(e) Interest receivable

Interest receivable is recognised on a time-proportion basis using the effective interest rate method.

(f) Employee benefits

Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided. A liability is recognised for the amount expected to be paid under short-term cash bonus or profit-sharing plans if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

(g) Taxation

Tax on the profit or loss for the year comprises current and deferred tax. Tax is recognised in the income statement except to the extent that it relates to items recognised in other comprehensive income or directly in equity, in which case it is recognised in other comprehensive income or equity respectively.

Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates and laws enacted or substantively enacted at the balance sheet date.

Deferred tax is provided on temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The following temporary differences are not provided for: the initial recognition of goodwill; the initial recognition of assets or liabilities that affect neither accounting nor taxable profit other than in a business combination, and differences relating to investments in subsidiaries to the extent that they will probably not reverse in the foreseeable future. The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates and laws enacted or substantively enacted at the balance sheet date.

A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the temporary difference can be utilised.

(h) Cash and cash equivalents

Cash and cash equivalents comprise cash balances and short-term deposits with an original maturity of three months or less from inception, held for meeting short term commitments.

(i) Financial assets and liabilities

The Group's financial assets and liabilities comprise cash and cash equivalents and accruals. Financial assets are stated at amortised cost less provision for expected credit losses. Financial liabilities are stated at amortised cost.

(j) Equity

Equity comprises of share capital, share premium, capital redemption reserve, share-based payment reserve and retained deficit.

Share capital is measured at the par value.

Share premium and retained deficit represent balances conventionally attributed to those descriptions. The transaction costs relating to the issue of shares was deducted from share premium.

The Capital redemption reserve is made up on amounts arising from the cancellation of the deferred shares.

Share-based payment reserve includes the cumulative share-based payment charged to equity.

(k) Share-based payments

The Group operates an equity-settled share-based payment plan. The fair value of the employee services received in exchange for the grant of options is recognised as an expense over the vesting period, based on the Group's estimate of awards that will eventually vest, with a corresponding increase in equity as a share-based payment reserve.

This plan includes market-based vesting conditions for which the fair value at grant date reflects and are therefore not subsequently revisited. The fair value is determined using a binomial model.

(l) Related party transactions

The Group discloses transactions with related parties which are not wholly owned with the same group. It does not disclose transactions with members of the same group that are wholly owned.

(m) Warrants

Warrants issued as part of share issues have been determined as equity instruments under IAS 32. Since the fair value of the shares issued at the same time as the warrants is equal to the price paid, these warrants, by deduction, are considered to have been issued at fair value.

(n) Accounting standards issued

The following amendments to standards were issued and adopted in the year, with no material impact on the financial statements (all effective for annual periods beginning on or after 1 January 2024):

There were no other new accounting standards issued that have been adopted in the year.

(o) Standards in issue but not yet effective

At the date of authorisation of these financial statements there were amendments to standards which were in issue, but which were not yet effective, and which have not been applied. The principal ones are detailed below. The Directors do not expect the adoption of these amendments to standards to have a material impact on the financial statements.

Effective for periods beginning on or after 1 January 2025:

In preparing the consolidated financial statements, the Directors have to make judgments on how to apply the Group's accounting policies and make estimates about the future. The Directors do not consider there to be any critical judgments that have been made in arriving at the amounts recognised in the consolidated financial statements with the exception of the valuation of share-based payments. Please see note 18 for further details.

The Company Directors are considered the only key management personnel and their remuneration was as follows:

Deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which the deductible temporary differences and carry forward tax losses/credits can be utilised. Accordingly, the Group has not recognised deferred tax assets in respect of deductible temporary differences and carry forward tax losses as at 31 December 2024 and 31 December 2023 respectively, as it is not probable at year end that relevant taxable profits will be available in future based on the current activities of the Group as a holding group. There are no expiry dates on these tax losses as at the year end. The unrecognised deferred tax asset is summarised below:

Earnings per share ("EPS") is calculated by dividing the loss after tax for the year by the weighted average number of shares in issue for the year, these figures being as follows:

The Subco Incentive Scheme share options (note 18) have not been included in the diluted EPS on the basis that they are anti-dilutive, however they may become dilutive in future periods.

The Company directly owns the ordinary share capital of its subsidiary undertakings as set out below:

The address of the registered office of Red Capital Subco Limited (the "Subco") is 28 Esplanade, St. Helier, Channel Islands, JE2 3QA, Jersey. The Subco was incorporated on 31 March 2021.

The A ordinary shares have full voting rights, full rights to participate in a dividend and full rights to participate in a distribution of capital. The B ordinary shares have been issued pursuant to the Company's Subco Incentive Scheme.

The Group's financial assets and liabilities comprise cash and cash equivalent, other receivables and accruals. The carrying value of all financial assets and liabilities equals fair value given their short-term nature.

Credit risk

The Group's credit risk is wholly attributable to its cash balance. All cash balances are held at a reputable bank in Jersey. The credit risk from its cash and cash equivalents is deemed to be low due to the nature and size of the balances held.

Liquidity risk

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due.

The Group's approach to liquidity risk is to ensure that sufficient liquidity is available to meet foreseeable requirements and to invest funds securely and profitably.

The following table details the contractual maturity of financial liabilities based on the dates the liabilities are due to be settled:

Financial liabilities:

All shares are equally eligible to receive dividends and the repayment of capital and represent one vote at the shareholders' meeting of the Company.

Following a sub-division and re-designation of share capital in 2021, the issued share capital of the Company included 180 deferred shares of a par value of £0.01 each. On 28 October 2021, in accordance with article 5B of the Articles, the Company redeemed for nil consideration the deferred shares. Any amounts standing to the credit of any nominal or share premium account relating to deferred shares that were redeemed were credited to a capital reserve of the Company (see note 16) and are available for use in accordance with the Companies Law.

Pursuant to the IPO Placing in November 2021, 4,000,000 ordinary shares were issued and allotted at a price of £0.10 per ordinary shares to certain new investors, for aggregate consideration of £400,000 in cash. Warrants with the right to subscribe for further ordinary shares in the Company were issued for every ordinary share subscribed for. No warrants have been exercised in the year or recognised to date in these consolidated financial statements (2023: £Nil).

Share premium and retained earnings represent balances conventionally attributed to those descriptions. The transaction costs relating to the issue of shares was deducted from share premium.

Capital redemption reserve includes amounts in relation to deferred shared capital.

The Group having no regulatory capital or similar requirements, its primary capital management focus is on maximising earnings per share and therefore shareholder return.

The Directors have proposed that there will be no final dividend in respect of 2024 (2023: £Nil).

On 12 November 2021, the Group created a Subco Incentive Scheme within its wholly owned subsidiary Red Capital Subco Limited ("Subco"). Under the terms of the Subco Incentive Scheme, scheme participants are only rewarded if a predetermined level of shareholder value is created over a three to five year period or upon a change of control of the Company or Subco (whichever occurs first), calculated on a formula basis by reference to the growth in market capitalisation of the Company, following adjustments for the issue of any new Ordinary shares and taking into account dividends and capital returns ("Shareholder Value"), realised by the exercise by the beneficiaries of a put option in respect of their shares in Subco and satisfied either in cash or by the issue of new ordinary shares at the election of the Company.

Under these arrangements in place, participants are entitled to up to 15 percent of the Shareholder Value created, subject to such Shareholder Value having increased by at least 12.5 percent per annum compounded over a period of between three and five years from admission or following a change of control of the Company or Subco.

The Subco Incentive Scheme detailed in note 17 is an equity-settled share option plan which allows employees and advisors of the Group to sell their B shares to the Company in exchange for a cash payment or for shares in the Company (at the Company's election) if certain conditions are met.

These conditions include good and bad leaver provisions and that growth in Shareholder Value of 12.5 percent compound per annum is delivered over a three to five year period for the scheme to vest. This second condition is therefore a market condition which has been taken into account in the measurement at grant date of the fair value of the options.

The weighted average exercise price of the outstanding B share options is £0.10 which have a weighted average contractual life of 1 years 10 months. 110,000 B share options were issued in the nine-month period to 31 December 2021, all of which were outstanding at the current year end. No B share options were exercised in the current or prior period. No B share options have expired during the current or prior period.

The Group recognised £1,569 (2023: £1,567) of expenditure in the statement of total comprehensive income relating to equity-settled share-based payments in the year.

The fair value of options granted during the year is determined by applying a binomial model. The expense is apportioned over the vesting period of the option and is based on the number which are expected to vest and the fair value of these options at the date of grant.

The inputs into the binomial model in respect of options granted in 2021 are as follows:

Expected volatility was estimated by reference to the average 5-year volatility of the FTSE SmallCap Index.

The target increase in Shareholder Value is laid out in the Articles of Association of the Subco and represents the compounded target annual increase in market capitalisation (adjusted for capital raises and dividends) that needs to be met between the third and the fifth anniversary of the Group's admission onto Main Market of the London Stock Exchange in order for the scheme to vest.

The Group did not enter into any share-based payment transactions with parties other than employees and advisors during the current or prior period.

Transactions with key management personnel

Key management personnel comprise the Directors and executive officers. The remuneration of the individual Directors is disclosed in the Report of Directors.

Other transactions

On 1 November 2021, the Group entered into an arm's length strategic advisory agreement with Tessera (a shareholder of the Company) pursuant to which Tessera has agreed to provide strategic and general corporate advice, and acquisition and capital raising transaction support services to the Group. Tessera is entitled to be paid a fixed monthly retainer fee of £5,000 (plus VAT) per month payable in arrears. A discretionary transaction success fee payable to Tessera may be agreed between the Group and Tessera with such payment payable on successful completion of an acquisition by the Group. As at 31 December 2024, Tessera was owed £Nil (2023: £Nil) by the Group for accrued monthly retainer fees.

There are no events subsequent to the reporting date which would have a material impact on the financial statements.

There are no contingent liabilities at the reporting date which would have a material impact on the financial statements.